STEWART PATRICK: Good morning, ladies and gentlemen. I'm Stewart Patrick, senior fellow here and director of the Program on International Institutions and Global Governance. On behalf of council president, Richard Haass, I'd like to welcome to you to our second annual symposium.

Before we begin, could I, as usual, ask everyone to turn off any cell phone they may have and other electronic equipment since it tends to interfere with recording and audio that we have here. I also want to remind everyone that, unlike many council events, this meeting is on the record. So your remarks will be recorded for posterity.

Allow me a few words -- moments to place this event into wider context and to offer some much-deserved thanks. The IGG program is the council's largest single initiative. In fact, it's one of the largest initiatives in the council's history.

We launched it because we saw a world that was being transformed by new issues, by new actors and by new powers. But our global institutions we believed were failing to keep up in confronting the world's most daunting challenges. What we try to do in our program is to identify gaps in current institutions, to propose pragmatic reforms for trying to fill those gaps, and then to engage policymakers in making necessary changes to deal with those gaps that we've identified.

The IGG program is made possible by a very generous grant from the Robina Foundation. This is the lasting legacy of James Binger, who died in 2004 and was a noted philanthropist and a long-time Council on Foreign Relations member.

Over the past two years, we've involved more than 20 of the council's fellows in the activities of the IGG program. And this has included producing dozens of reports on priorities for institutional reform, and you'll find several of those on the table outside.

We've also created something that we hope you'll check out that's online, which is a wonderful resource, a multimedia resource called the Global Governance Monitor, which tries to track and evaluate efforts in multilateral cooperation across a wide range of different issue areas, ranging from climate change to global financial instability, to nuclear nonproliferation and coming up on global health. We're deeply grateful to the Robina Foundation for making all of this possible.

A few words about today's symposium. In the 21st century, prospects for effective multilateral cooperation in confronting the world's most daunting challenges are going to depend first and foremost on the interests and world-order visions of the world's most important powers. But the identity and number of those players is changing, creating new challenges and opportunities for cooperation.

The United States obviously has a powerful interest in integrating these countries into a rule-bound system of international relations. The good news today is that none of the major emerging powers are revolutionary in the sense of trying to overturn the existing order.

But each of these countries is at least moderately revisionist. All hope to adjust the structures and norms governing global security and economic relations to suit their preferences. The order that ultimately results from all of this is going to be the product of tough bargaining and negotiation between established powers like the United States, the European Union and Japan, and the rising pillars of world order, including China, India and Brazil, as well as a number of emerging middle powers.

To better understand the visions and priorities of global institutional reform that these countries have in mind, we've been holding an international meeting series. We've had a workshop in Rio de Janeiro and another in Beijing and we'll be holding another one in New Delhi.

One of the things that we've learned from these meetings is that today's ascending powers have -- are deeply ambivalent about their global roles. They want to be at the high table, they want to alter the rules of the game and they want more say in global governance structures. But they're also -- as self-defined developing countries, they're leery of assuming additional burdens and obligations of power, and particularly leery of picking up the check and providing global public goods.

Our two panels this morning are going to begin to look at how some of these dynamics are playing out in global economic and security relations, and what the implications of these trends are for multilateral cooperation and global institutional reform.

Our first panel looks at the global economic and financial system in the wake of the meltdown that began in late 2008. We've obviously already seen some adjustment here with the creation of the G-20 announced in Pittsburgh by Obama, which President Obama announced in Pittsburgh would henceforth be the premier forum for global economic coordination. We've also seen the creation of something called the Financial Stability Board. And next month, both the G-20 and the G-8 will be meeting in Canada.

So far, the G-20 has shown impressive cohesion in dealing with the global economic crisis. But will this cohesion persist as the world moves out of crisis? Will established and emerging powers address long-standing imbalances in the global economy? Do they have the same vision for the G-20 and its relationship to the G-8? Will they agree to adjust the governance structures of the World Bank and the International Monetary Fund, and are they committed to reviving a more abundant trade agenda?

The second panel this morning addresses the role of rising powers in arresting the specter of nuclear proliferation and potential someday nuclear use. As we speak, U.N. member states are gathered for the NPT review conference in New York where they're engaged and struggling really to preserve a fraying nuclear nonproliferation regime as new states pursue nuclear weapons, as nuclear technology spreads and as disarmament pledges go unfulfilled.

The choices that today's rising powers will make will play a critical role in whether or not this regime actually survives. This is particularly true of nuclear-armed India, which remains outside the regime and in a somewhat anomalous position. But it's also true of Brazil, which has spent obviously the last week flexing its muscles in nuclear diplomacy, much to the consternation of Washington.

Can established and rising powers forge new bargains to contain these threats and bring all nations within the regime? Can they reach agreement on the often competing goals of nonproliferation, disarmament, peaceful access and peaceful access to nuclear energy?

To close the conference, we're honored to have as our keynote speaker Deputy Secretary of State James Steinberg. He'll describe the Obama's administration's attitude towards engaging rising powers as part of what it describes as its multi-partner world.

Five years ago, as you all know, his predecessor articulated one possible approach to this question with respect to China, suggesting that the world was looking to China to become, quote unquote, "a responsible stakeholder."

As the intervening years have suggested, articulating the concept of responsible stakeholder is a little bit easier than putting it into practice. There's an ongoing debate around the world about who gets to define what the meaning of "responsible" is and also about the balances between privileges and responsibilities that are inherent in stakeholder status.

It will be interesting to see whether or not Deputy Secretary Steinberg sheds any light on this question and whether or not perhaps he'll hint as to whether or not it will incorporated in the national security strategy that is supposed to be released next week.

Before closing, I just want to thank a few people who have been involved in putting this together. I want to thank in particular the D.C. meetings team, including Chris Tuttle, Emily McLeod and Scott Macmurdo for their herculean efforts, which occasionally I think seem Sisyphean, to bring this event to fruition.

I also want to thank Kaysie Brown and Farah Thaler of my staff for their terrific help in planning this event, and also Preeti Bhattacharji and Rebecca Friedman for helping to staff it. With those preliminaries, I'd like to turn the floor over to the first panel. Thank you very much.

(Applause.)

DAVID E. SANGER: Well, thank you very much. Thanks for the introduction there, and thank you all very much all for coming. I'm David Sanger. I'm the chief Washington correspondent for The New York Times and delighted to be the moderator and facilitator for this opening session.

It's great to see all of you out here because I've learned over the years that there are three types of Council on Foreign Relations members. There are those who just send in the check. There are those who show up occasionally at events like this. And then there are the true members who are willing to come to an 8:30 a.m. session. And so you are in fact the chosen few.

I am supposed to give you the following warnings: First, that this is on the record. As a reporter I'm delighted to say that. Second, to tell you to turn off your cell phones, or if you insist on leaving them on, put them in the pocket of your neighbor so they're the one who is is embarrassed, and that we're going to start this discussion just with me asking a few questions for a bit and then we're going to open it up to all of you, which will be the core part of the discussion.

Let me just introduce very briefly our very terrific panel today. You have their bios so I'll do this in short order.

Whitney Debevoise is a partner at Arnold & Porter. He was the U.S. executive director of the World Bank at a critical moment. And of course those of you who know the World Bank structure know that that is the presidentially appointed position to basically be ambassador to the World Bank. He's written extensively on securities regulation, WTO dispute resolution and so forth. He has been a lecturer at Harvard and Yale Law Schools and has been a member of the Council on Foreign Relations, and did I overhear has family that were also in -- early founders of the council, is that right? So he gets the permanent seat here as a result.

Arvind Subramanian is a fellow at the Peterson Institute for International Economics and also at the Center for Global Development. He's written extensively on growth, trade, development. I know that I have turned at many moments to his writings and they are worth digging up and referring to often.

And Antoine van Agtmael is the founder, chairman and chief investment officer of Emerging Markets Management, which is one of the leading investment management firms for emerging market equities. He's also written extensively, including a terrific book called "The Emerging Markets Century," which came out --

ANTOINE W. VAN AGTMAEL: Three years ago.

SANGER: Three years -- and which taught me a lot as I was sitting down to write a book myself. So I was very happy to see this. He's the chair of the NPR Foundation and a member of the board of NPR and a trustee at Brookings.

So let me start with the most recent events first, and then let's walk our way backward for this. You have seen in the past two weeks an effort by the Europeans to step in and rescue a member of the union and also a euro currency signatory who many countries, Germany in particular, probably wishes at this point they never let into the euro. It has raised all of these big issues of who is it who's supposed to be doing bailouts in periods of time like this, and who is it that can override the issues of sovereignty that clearly the Greeks and many other members of the euro are particularly nervous about these days.

And one of the fascinating elements of this crisis has been this dance that started in February and really is not complete about who is responsible for both doing the bailout but also resetting the rules. Was it the members of the euro? Is it the IMF? Is it really the G-20, the group that has now ascended, as we heard before from Stewart, as the main body that is supposed to be setting the rules here? And we're in this strange period of time when it's not entirely clear who it is who's supposed to be the conductor on the train here.

So let me start first with you, Antoine. What do you -- what's your sense of where this is going?

VAN AGTMAEL: Well, first of all, I think for the members of the eurozone, this is really less bailing out Greece as it is bailing out the euro. That's really what they -- (laughs) -- are concerned about. And I think it took a long time for those within the eurozone that have the money, principally Germany, to -- who had gone through a situation earlier with the former East Germany and knew how much money this costs when you do this -- to step up.

And so there really was a period where the question that you raised was very valid: Who is in charge here? As I think we went along, it became clearer and clearly that really nothing would move without Germany taking the place at the captain's -- you know, at the steering wheel, and I think that has happened.

SANGER: But that's pretty fascinating in and of itself because we've created all of these big multinational institutions, and in the end, as you say, it came down to one country.

VAN AGTMAEL: Well, let's say without that country coming on board --

SANGER: None of the institutions could do it.

VAN AGTMAEL: It wouldn't work. It would be my assessment.

ARVIND SUBRAMANIAN: But I think -- David, coming back to your question, I think what was interesting about your question about many conductors -- which -- (inaudible) -- is the conductor -- I think there proved to be many conductors in this, that what everyone thought initially would be an entirely European affair, you know -- and everyone was looking to Germany -- turned out actually to be an international affair.

So the International Monetary Fund did become a key player in this for a number of reasons. One, of course, you know, we need a lot of money to bailout Greece and then the other countries. But the other also was because the IMF turns out to be a very useful institution when you want to impose tough conditions on countries that the Europeans themselves did not want to be seen to be imposing on their brethren within the eurozone. So initially, it was to me very interesting that the IMF had such a crucial role when everyone thought this is a purely European affair.

And so there's a European element, there was an IMF element and of course sadly there was also a G-20 element because when we needed, you know, IMF money, it turned out to be very useful that the G-20 had earlier agreed to expanding the size of the IMF because then there were no doubts about -- because remember, at one point, the question did arise: Does the IMF have enough money to bail out not just Greece but also possibly some of the PIGS. And then we were all doing these calculations -- you know, $750 billion, 1 trillion. Does the IMF have enough resources?

And thankfully in the wake of the crisis in 2008 and 2009, the G-20 had agreed to expand the balance sheet of the IMF, its capability. So although that's not going to be immediately used, the fact that it was seen to be available was actually very helpful in terms of this current crisis.

SANGER: Okay, let me just press you on that for just a moment having just spent some time with some of the IMF officials who were involved in this. I was struck by two things that they have just said in the past couple of days on this.

Number one, their vaunted early warning system, which was really set up after the Asian crisis, which was supposed to, you know, set up lights going off up and down 19th Street when countries were about to go under, basically failed in this case. It moved much too slowly for the way events -- the second thing they said was they were really lucky this was Greece primarily and a few other of the not-terribly-wonderfully-named PIGS because they were concerned that if this did spread elsewhere, even the increase that they've had in 2009 would not enable them to have the resources to go deal with this.

So did we discover in the course of this some problems in the way we have reformed the IMF? Either one of you.

ELI WHITNEY DEBEVOISE II: I mean, I guess I would just say that we're witnessing an evolving situation. I mean, in Pittsburgh, the G-20 declared themselves, you know, sua sponte, the premier forum for international economic cooperation. But you have to remember that with these G-20 summits now, we move to the head-of-state levels. This is not finance ministers and central bank governors anymore.

So the European situation started to unfold. The G-20 did finally hustle out a statement after the big announcement in Europe of the big package, but it was a kind of an appendage if you will. But these things, I think, are going to exhibit some growing pains and we -- we'll continue to see a very important role for the fund.

If you think back to the 1980s in the commercial bank debt crisis, there was a time when Peru said, we don't want to have IMF monitoring, and the commercial banks sort of went along with that, but then they discovered that they had no way to enforce anything and so it all went back to having the IMF there.

SANGER: Let me ask you about the G-20, briefly. When the G-7 was sort of ushered out at Pittsburgh and the G-20 ushered in, the one question that the Obama administration didn't really want to answer that day was can you get everybody -- can you get enough agreement among 20 countries who have such a broad set of economic conditions and interests that you'd actually be able to get very much done in a non-crisis situation or even when a crisis just begins to abate?

You know, it's a variant of the question you're going to hear at the next panel where we've got 190 countries trying to meet on the NPT in New York these days, and you get 190 countries together, they can't agree on what time to break for lunch. So tell us if you think the G-20 structure is simply too big -- too diverse for this job.

Actually, I'd love to hear that from you since you were at the World Bank, a place that has encountered this problem more than once.

DEBEVOISE: Yeah. Well, I sat on a board of 24, which is unwieldy. Twenty is an unwieldy number as well. But, again, I think I see this more as an evolutionary situation. And I think we have to watch out also for mission creep. I mean, the G-7 and then the G-8 summits started out pretty narrow economic focus, and by the end, it was just a big talk fest of all kinds of subjects. So, again, I think it requires some discipline.

But look at the umbrella that the G-20 is trying to create when you go back to the Pittsburgh declaration. They're talking about the fund, the FSB, the bank, international energy issues, the WTO, climate change, UNFCCC. So is 20 going to be the right forum to resolve all of those things? I think probably not. But it's going to have to be issue by issue. Things are going to have to be worked out, and we may see some more consolidation because, you know, the question was raised this morning about being responsible. Are all of the G-20 members responsible all of the time, question mark?

SANGER: Antoine.

VAN AGTMAEL: To me, the G-20 is just a way station to the G-7, but a new G-7. And the new G-7 would be the United States, the eurozone, Japan and then the four BRICs. And those are the ones I believe that really are going to form the economic steering committee.

SUBRAMANIAN: I think I disagree a little bit. I think symbolically, we're talking about the G-20 as, you know, replacing the G-7. So symbolically we're in a different world. Many, many more countries other than the G-7 are going to determine. However, I think it's going to vary across issues and across situations.

Take Greece, what happened in Greece. It was almost a European thing with some prodding from the United States. So the G-20 really had no serious role with this. And that's how it's going to be depending on the situation. And, you know, on climate change, it will probably not even be the G-7 but some subset of India, China, Brazil and the United States. So that's going to vary across -- on the exchange rate, for example, it's going to be, you know, the U.S., China, maybe with a little bit of help from other emerging countries. So that's going to vary from issue to issue.

But symbolically -- but the G-20 is there to stay. But the irony now of course is that -- you raise the question of, you know, is it going to be effective? Is it unwieldy, for example? Once the G-20 has been set up as the world's new steering committee, we're also getting concerns from the other side now: Is it legitimate and representative? What about all of those people who don't have a seat at the table? And my colleague Anders Aslund who kind of represents Sweden and other countries like that, said let's scrap the G-20; let's go back to the IMF because they don't have a say in the new process.

So we're going to see this debate going on. It will never be fully resolved. And ultimately the effectiveness of this institution will be determined by how successful they are in making decisions on practical matters.

SANGER: And this may be sort of the economic equivalent of having the Security Council versus the General Assembly at the other, I mean, where you've got one less representative group, but they're supposed to act on a more urgent basis.

Let me turn to the question of sovereignty for a moment because we hinted at it at the beginning but we haven't honed in on it. So in the euro, from its beginning, everybody warned about the difficulty of having a common currency and then individual country control over your fiscal policy.

And then as countries entered the euro, you had a situation where everybody sort of turned away and didn't want to examine too carefully whether or not countries that were entering the euro fit the strict requirements, including debt ratios that many countries, including the United States, couldn't get close to striking these days for membership.

Now we've come full circle to the discovery of what happens when you've got a commonly managed currency and you don't have commonly managed fiscal policy. And it's the issue that nobody really wants to debate too much because we've already seen the pictures of rioting in the streets of Greece.

So tell us how we get past that bifurcation. Do we have to move to a position where there are binding rules on fiscal policy for members of the euro or similar cases? Or is that a step that would in fact break the euro?

VAN AGTMAEL: I think you're already seeing the beginning of that with the Germans passing the law internally and now wanting to kind of expand that law all over the eurozone where the deficits are limited. And I think we forget that there was actually an effort, the Maastricht Treaty, where supposedly these deficits would be limited to 3 percent of GDP. Now, in practice that didn't happen.

Another point is that you could make the argument -- in fact, I would make the argument that the euro in some ways caused the crisis in Greece because when money became very easy in Greece, people just went, as they have gone in other countries, bonkers in terms of spending, and that created, in essence, this problem. So it was the joint, combined monetary policy that in effect nearly inevitably led to these problems and then will lead, I believe, to an agreement among -- makes the necessity obvious of an agreement between the various partners in Europe to limit deficits; otherwise, it's not going to work.

DEBEVOISE: Well, I would hearken back to something that I think I heard Sir Eddie George say when he was governor of the Bank of England about why they weren't so keen on the euro. And he said, my monetary policy will be set in Frankfurt, my fiscal policy constraint will be set by Maastricht and my only remaining adjustment lever will be unemployment. And we don't have true labor mobility in Europe and that's just not going to work. So even if we end up with common fiscal policy, I think we can't forget the third leg of the stool.

SUBRAMANIAN: But coming back to your question about sovereignty, David, I think there is a kind of, I think, emerging kind of law here about sovereignty that -- economic sovereignty. It's kind of -- I would call it something like the vanishing middle about sovereignty.

You know, you can't be in this -- you can't be half sovereign, like half pregnant, because either you have to move completely to the side of saying, you know, if you want to have economic union, you have to -- monetary union, you also have to have political union. Or you have to say, you know, trying to get countries that are very different is not going to work and you have to go the other way and give them a little bit more sovereignty, like the U.K. situation. The U.K. wants to have the exchange rate as a lever.

Now, which way Europe will go I think is completely open now. And I think that is the lesson of Greece now we know. There are those who say let's go towards fiscal union, but, you know, you will have to have transfers and binding rules. Is Germany willing to pay the check? But the broader point about sovereignty is I think really that, you know, we're seeing the euro experiment as something saying that halfway houses on sovereignty don't work.

SANGER: And perhaps we're lucky this was just Greece because the size of the economy is so small. But let's try to push this forward, and let's assume for a moment a worst-case scenario in which a much bigger economy that is also running very large and, over the long term, unsustainable deficits gets into similar trouble, gets attacked by the markets in similar ways, but is basically too big for a bailout, what's that stress do? Does that break up the common currency? Or does that create to your mind a political argument that could be winnable for a broader common fiscal policy?

Whitney?

DEBEVOISE: Well, I guess one should never quibble with the hypothetical of the questioner, but it seems to be a contradiction. If it's too big for a bailout then, you know, bringing them all together to bail out doesn't seem to work. (Laughter.)

SANGER: That's right. Or that politically you're just not going to get -- I mean, you saw what a strain it was in Germany just to get this amount. So, you know, it wouldn't take a much larger bailout to break the political consensus in Germany.

DEBEVOISE: Sure, sure. Well, I mean, I'd like to broaden your question. I mean, I think the impact is being felt not only in Europe but we've seen the introduction of a provision in the financial regulatory legislation here relating to U.S. participation in IMF programs for countries. So the notion that Pennsylvania doesn't want to bailout California is spreading around the world; it's not just Germany doesn't want to bail out Greece.

And I think coming back to the larger question of today, the global governance, I think we have to look at these institutions and look at the different structures that they have. You know, the U.N., 192 countries; one country, one vote. The Fund and the Bank, we still have weighted voting, and you can get some things done.

And I think that's going to be the question going forward, is how are these smaller groups of countries that provide critical masses on specific issues going to operate. And on this one, you know, I think there was a fair amount of nudging from behind the scenes from some non-European players. That was important.

SANGER: Antoine?

VAN AGTMAEL: Well, I think Europe has a clear choice. Either individual countries give up more sovereignty in terms of economic policymaking or the euro will simply not survive.

SANGER: It will crack.

VAN AGTMAEL: It's as simple as that. Now, my bet would still be on the euro surviving because typically the type of reforms that you're talking about here, people don't like to make, and they are only done when your back is against a wall. And let's face it, you were talking earlier about the early warning systems. I worked in the World Bank for a long time and went through some of these other crisis of an earlier vintage. I have never seen economic policymaking, early warning systems work ever anywhere.

SANGER: Because the timing's always off. I mean, you can look at the numbers and see the debt, but you don't know at what moment the markets are going to consider that to be unacceptable.

VAN AGTMAEL: Crises are all -- and I'm an investor; I should know better -- but crises are always unexpected. And that's actually the nature of a crisis.

SUBRAMANIAN: Well, your point about -- David -- about timing is right. However, even on this early warning, I think if the IMF will claim with some justification that if you go back and read the reports on Greece of a year ago, I mean, they were saying pretty dire things, as indeed they would claim they said dire things about some of the Eastern European countries in '07 and '08 leading up to the crisis. And that's going to be endlessly debated.

So it's not as if, you know -- and remember, one thing -- for all of the economists' fault, this was a chronicle of a crisis foretold. Everyone knew that if you get into a common currency with this kind of halfway house, if there are asymmetric shocks, you will need levers of -- (inaudible) -- to adjust, and frankly, there weren't levers.

So this was classically kind of predicted and discussed at the time the euro was conceived. So this is not a crisis that was in some way, you know, completely unanticipated or unanticipatable.

SANGER: That's right. But the timing is critical because, you know, people who are writing reports about the United States right now take a look at 11 percent, you know, deficits and say this is unsustainable. The government itself says it's unsustainable. But that doesn't help you on the question of at what moment will the markets lose all confidence in you.

DEBEVOISE: Well, and I think the modeling can't take into account the politics, either the politics of the country that needs to adjust, nor the politics of these global governance mechanisms that we've been talking about. You know, just as on the domestic side we had people asking why one approach for Bear Stearns, why another approach for Lehman, so people were asking back in the '90s, you know, why one approach for Argentina, why another approach for another country.

And when you get into these situations where it's basically a political decision or where we have institutions that don't turn on a dime -- the situation in Greece has been bubbling now since January or February even on the political front. And so that's where the governance mechanisms become important. We probably could have solved Greece in January for a lot less than today.

SUBRAMANIAN: David, it's interesting. Actually thus far, we have been talking about the problems of declining powers and multilateral -- (chuckles) -- institutions. We haven't really talked yet about the issue of rising powers and multilateral institutions.

SANGER: Well, let's turn to that as one last topic before we go out to the audience. One of the other fascinating elements of the financial crisis from its start and the first G-20 meeting has been the role that China has played in an effort to create what for a while we were writing half-facetiously as the G-2.

So if you're the Chinese and you look at a Europe that will be consumed by this issue for the next 18 months, minimum, and probably longer, a U.S. that is going to be consumed by its own debt issue for years to come, how do you play it?

SUBRAMANIAN: How do you play it -- well, I think I want to go back first to a point that Stewart Patrick made in the introduction, that there is a sense in -- and I know the Indian situation a little bit better than the Chinese situation -- that you know, there is a clamoring to be at the table. So, we want power. But power for what purpose is still completely open I think. And I don't think they have resolved this in their own minds, what they want it for.

So, they're happy with the way things are evolving. But you know, it's not clear what is going to happen with the power that they have acquired. But I think there are a couple of, I think interesting things that are worth noting here. One is that if you look at the G-2, for example, the Chinese exchange rate was for along a G-2 issue, you know. The U.S. bashing China on the exchange rate.

But over the last few months, what we've seen is that the United States with, you know, advice from various people, and Secretary Geithner have successfully, I think, multi-lateralized the exchange rate issue into something that's not just a G-2 issue, but more broadly a G-20 issue. Even the way in which the announcement was made in April by Secretary Geithner that you know, we're not going to make a judgment on whether it's currency manipulation. We're going to wait for various international fora to take these issues up.

And then, a number of other emerging market countries also raised the fact about, you know, the Chinese exchange rate hurting them. So that's -- I think is to me, is a nice example of the G-20 not just resolving issues between you know the erstwhile rich and the rising powers. But also, something that, you know, it's become a forum where some emerging market countries try and resolve these issues in effect themselves you know. The Chinese exchange rate affects India, East Asians, as much as it affects the United States.

So I think -- so you know, everything is up for grabs. You know, huge opportunities for the emerging powers. In part because, as you said, you know, the U.S. and Europe are going to be kind of self-obsessed with issues of their own. So, it's all open and everything to play for. But I think the rising powers have not yet, and probably will not for some considerable time, resolve what they want the seat at the table for.

DEBEVOISE: And I think too Antoine made the point about his vision for the future G-7, and he used the term the BRICs. But I think it's important to understand some of the dynamics among the BRICs. In this negotiation that we just went through at the World Bank, there was clearly a formula that one could adopt based purely on economic weight in the world. But if you had followed that formula, China would have taken all the increase.

And it was actually China and the United States forbearing in terms of the amount that they would be entitled to take under a formula that facilitated the deal. And so I think that, you know, you're patient, you bide your time. I mean, in some sense these countries already have a seat at the table.

The question really is what is the size of the seat, and what do they use it for. And certain of these players can take a fairly long-term view, because the trends are fairly obvious. So if you come back in five years and revisit things, you know, it's probably going to be going your way.

VAN AGTMAEL: If I were China, what I would do is four things. First is I would clearly recognize that like it or not, I'm now a player, and a serious player, a major player. I mean, let's not forget that it was really China that got the world economy going again after this crisis. Second is I would hold on to my pocketbook, because there's going to be lots of demands on the pocketbook. Third is I would say well, here I am. I have all this extra money, the dollar has problems for the reasons you've already mentioned. The Euro has problems.

Well clearly, I have to put my money somewhere. So they will strengthen the demands, requests, ideas they have put forward on a new reserve currency. I think a lot needs to be done before that is finalized.

SANGER: Asian reserve currency or --

VAN AGTMAEL: I don't know what shape that will take, but it will be something along those lines. It will basically be something that represents the currencies that are actually -- over the coming decades, because we live, I believe, in the emerging market century -- are going to strengthen. And finally, I think I would be very careful about not becoming too smug. And that risk is very high.

SANGER: Great. Well, let us now turn to all of you. And when I call on you, if you would please tell us who you are and your affiliation. And if the question could really have a question mark at the end of it, would be great. Terrific.

In the back there, sir.

QUESTIONER: Hi, my name is Harvey Rishikof, I'm with the ABA and the National War College. When I was in graduate school, we used to have a guy name Ray Vernon (ph). He used to talk about international reserve currency, which was passed from the Brits to us.

And your last comment is -- that was made by the speaker, I'd like to sort of push the panel. If that's true, we are the international reserve currency. And we're under -- the dollar is under attack for all the points that you made.

And then, you raised the issue of -- you talked about the exotic special drawing rights as being a new sort of solution for the reserve. But that would be unprecedented in the international political economy to have a reserve currency that's not controlled by a sovereign. So I'm kind of curious what the panel's understanding of what they see as the eventualities if the dollar starts to become even weaker, and we have to go to a new sense of what we're going to do with a monetary policy like that.

SANGER: Arvind.

SUBRAMANIAN: So, two points. One is, the humungous irony of all this of course is that while China, you know, criticizes and moans and groans about the dollar's status, there is no country in the world that is doing more to keep up the reserve status of the dollar than China by buying gazillions of reserves every month. So, there is the deep irony in the heart of all this.

The second point, however, I think is -- is something that Antoine mentioned. I think there is a Chinese strategic plan, you know. The SDR is never going to become an international currency, as you quite rightly said. But the Chinese do have a strategic plan to make -- to bolster the claim of the yuan as a long term alternative to -- not an alternative that is completely displacing the dollar, but certainly as a complementary rival to the dollar.

And you can see this in many, many actions that China is doing. 2020, they want Shanghai to be an international financial center. All these bilateral swap arrangements that China has entered into, the Chiang Mai Initiative, the Asian reserve thing, is getting a boost via Chinese contributions. So there is a strategic plan of course that China -- to boost the role of the yuan over the longer run.

Of course, the success of that will depend a lot upon not just on what China does, but on what happens to the United States and its fiscal situation. But remember, one thing about the history of reserve currency tells us is that it's not all one to the complete exclusion of the other. Even today, you know, the Euro is a kind of semi-reserve currency within Europe. You know, the yuan will start playing that role certainly within Asia. And we will have you know spheres of reserve currency influence. But over the longer run, one could see the yuan as a credible challenge to the dollar if current projections performance continues.

QUESTIONER: (Off mike)

SANGER: If you would just wait a moment -- somebody is coming to you with a microphone.

QUESTIONER: Nobuyasu Abe, the director of the Center for Disarmament and Nonproliferation in Tokyo. We're talking about global institutions. And I think the great value of global institutions is to have a force to attract countries to join the club. So that they keep the rules of that club.

And in terms of the IMF and some other economic institutions, for example OECD, one basic rule is not to have currency control except for serious balance of payment problems. The OECD has a rule on the guideline on export control -- and I mean, export credits, financing the conditions, and export insurance. I think we have to accept those emerging countries eventually. But when you let them join, you should insist on accepting those rules.

And the recent history showed that they have not insisted it strong enough. For example, I understand that they have increased the share of the -- of China in the IMF. But they didn't insist on currency exchange question. I think they should insist on that -- the West as a whole should insist on accepting those rules when they let them join the club.

SANGER: Whitney, easier said than done, as your experience at the -- (Laughter).

DEBEVOISE: Well, I think you won't find much dispute among the panelists on that proposition.

VAN AGTMAEL: I would actually completely agree, this is much easier said than done. I mean, the fact is that the world in the 21st century is very different from the world in the 20th century. The United States or even the G-7 cannot dictate to China, just as the United States at the time tried to dictate to Japan. It didn't work very well either.

What the rules should be -- we live in a different world where now we share power. And it's not going to happen. No. What is interesting is what the administration did, which is to kind of played -- is not unilaterally, but multilaterally. And I thought that was actually a very clever thing to do.

SANGER: Mac.

QUESTIONER: Mac Dessler, University of Maryland. Thank you, David.

One of the issues that has been temporarily gotten less attention perhaps is what the Pittsburgh Communique referred to as rebalancing the world economy. And particularly, the United States used to run humungous current account deficits, now we only run huge ones. But there are some signs that we're beginning to grow again. All the countries subscribe to some fairly strong language in the communique, but of course non-binding, about steps to rebalance their own economies. And certainly, any scenario for the United States beginning to dig out of its own debt crisis has to involve a reduction -- a substantial reduction in the degree to which we continue to accumulate international debt through running large deficits.

I guess this has to become an international institution's question. So I guess my question would be what institutions if any could be expected to address this issue? And do the members of the panel see any prospect of the prime countries, you know, moving toward some serious multilateral approach to this issue?

SUBRAMANIAN: I've written about this so let me answer this the following way. Clearly, you know, the rebalancing has to be done internationally and multilaterally. Clearly, the IMF tried and comprehensively failed to address that issue. You know, of course, Antoine will say that you know, temporarily of course you know, in this year, it seems as if the imbalances have reversed themselves.

But the whole question of what will happen going forward remains open. So I'm assuming this problem will come back again. So the IMF has comprehensively failed. And so what -- (inaudible) -- of the World Bank and I have argued is that we have to bring in the WTO into this question, because it involves an undervalued exchange rate.

So our proposal would be to have a multilateral approach, but one that involves both the WTO and the IMF. Where the WTO would say, you know, certain kinds of egregious under-valuations tantamount to an export subsidy and an import tariff, which need to be, you know, addressed. And the IMF would play the role of a kind of technical arbiter in determining whether the exchange rate is or is not over-valued.

And then, if a country didn't change its policies, the prospect of trade actions would remain open again to these countries. Because the points that we've had imbalances, we've tried it in the IMF for many, many years, and it hasn't worked.

VAN AGTMAEL: I actually would not say that the rebalancing has been resolved at all, quite the contrary. I would -- but I would say that rebalancing has to start with us. We are the problem, or at least the major problem, I would argue. And so, I mean, it's our budget deficits, which are going in the wrong direction.

And it's our current account deficits, which may not being going in the wrong direction, but are not yet moving very fast in the right direction, that need to be addressed before asking other people to do things. Now, that doesn't mean that should be excluded because it is a tango of two, but it has to start with us.

SANGER: But Antoine, if I heard Mac's question right -- and Mac, tell me if I've got this wrong. Part of your question was what do the international institutions do to get us to line up right? And just look at the politics of the United States right now. Look at last night's primary results.

And tell us what it would look like if we had any international institution stepping in, and saying you now have, you know, 24, 36, 48 months to bring your budget within 3 percent -- your budget deficits within three percent of GDP. You could hear the world governance screaming already.

DEBEVOISE: Yeah. Oh, I mean, I think without getting into the question of who ought to go first, the question is really the flip of the question we just got here from this gentleman about China. You know, easier said than done. And it's pretty much that simple.

And I think that we have to you know work at this, chip away at it. It's not going to be done in a bold stroke. And institutions can set frameworks, but the realities are that we've been certain sized players, and they're not going to do -- have immediate suasion.

SUBRAMANIAN: I think we can't just throw up our hands and say you know, big powers are involved; and therefore, nothing can be done about it. I mean, as the gentleman also said, we do have certain rules-based systems for cooperation. And we have to try and further that. If the question is that, you know, in the case of China for example, one would have to think about you know, what is it that one can do by way of carrots and sticks to encourage China to play by the rules?

And as we need you know the United States to play by some rules as well. But to just throw up our hands and say you know, it's not possible because big powers are involved, is not something that I think is very appealing going forward. And we have to strive hard at, you know, at coming up with, you know, institution designs, carrots and sticks, that would allow countries to, you know, both agree to rules, and then abide by them subsequently.

VAN AGTMAEL: There is such a thing as too big to fail, but also too big to put conditionality on. And I think it's only going to happen if actually -- and this is why we come back to this issue of multilateral institutions. If the voting there changes -- if there's actually going to be more pressure on these too big to put conditions on, to actually do some.

SUBRAMANIAN: But that's what's -- I'm sorry -- we have to -- this is a, you see --

DEBEVOISE: It's tough for us.

SUBRAMANIAN: No, no, I think there is -- you know, in the WTO routinely huge disputes come up and are decided, adjudicated with a reasonable degree of compliance. So it's not -- I mean, the U.S. abides by, you know, its commitments, by and large. Europe by and large abides by its commitments. So it's not as if we have a system where, you know, the big powers get to do whatever they want, and that they're too big to regulate or constrain. We do have --

SANGER: But Arvind, that usually happens involving specific, usually commercial disputes. What we're discussing here is saying to a country, I'm sorry, you're not going to pay pensions at this level. You're not going to turn out Social Security or Medicare at this level. And that's a very different political dynamic.

DEBEVOISE: Well, and even in the WTO, if you read the dispute settlement understanding carefully, there's a little footnote that says that any country, any member before bringing a case needs to think seriously about whether bringing a case will lead to a resolution of the matter. And they're certain -- it's sort of a existential issues that don't get brought. I mean, the case of the you know, U.S. activity in Nicaragua in the '80s was something that -- you know, would we have had a state security exception recognized or something like that? And these cases don't go there.

SANGER: We have a lot of hands going, so let me move the questions along.

QUESTIONER: I'm Jim Gilmore (ph) of the Gilmore Global Group. Last week, when I was watching what was going on with Greece, I kind of sat back with a certain sense of satisfaction, and said okay, they've been running these social democracies over in Europe, and the pretensions to the Euro and all that kind of thing. And now, the chickens have come home to roost. So let's see how they deal with this. Because I'll be curious to see what happens.

And I woke up the next morning and found that actually the American taxpayers stood behind the solution. IMF, the American taxpayer is the biggest contributor. I think I'm a little vague about this, but I think even maybe other institutions of American finance, the Fed or otherwise stood behind this solution. What happens if the American taxpayer decides he's (sic) no longer going to finance all this? What happens to the international global regime in terms of finance?

SUBRAMANIAN: I think, you know, one has to be careful here about saying, you know -- two things. It's a cooperative effort, you know. The IMF represents cooperation amongst 190 plus member countries. And everyone is chipping in to this effort to bail out, you know, Greece and maybe Europe, point number one. The U.S. is about 17 percent of that, so the U.S. is not the only one that is contributing.

But second, you have to remember that the reason for doing that is also a huge self interest. If you don't contain this problem, it comes back to our shores here, and maybe we suffer even more. So to prevent that, this small 17 percent is kind of a small insurance premium against what could be potentially a very big thing. So I think one has to view this in this cooperative framework and in the self-interest framework.

However, there is an interesting point which -- I wrote a piece in the Financial Times last week where I picked up on the sentiment that you said, and said actually, you know, you're worried about the American taxpayer paying for it. What about my poor brethren in India you know, as the Indian taxpayer -- very -- much poorer than the American taxpayer, is also contributing to this effort, you know. So, he's making contribution too.

But there, I think -- so the kind of accusation that I have against this whole thing would be why is it that when every taxpayer is paying, the German banks and the French banks and the private sector is being bailed out in Europe, and not being made to contribute? So that's an open question.

I call this immoral hazard because you know, heads, the German banks win, tails, the international taxpayer picks up the tab. Not just the United States, but everywhere else. But that's a kind of different point from saying, you know, oh, you know, we the U.S. are getting nothing out of it.

SANGER: Richard.

QUESTIONER: Richard Gardner, Columbia University. I'd like to invite the experts to talk about a subject that's been sort of neglected so far: the rising powers and the Doha Round and the international trade regime. Right now, we seem to be in real difficulty in the Doha Round -- the gap between China, Brazil, India on one side, and the United States certainly on the other. The U.S. is saying we don't see on the table from the rising powers enough in terms of market opening for this administration to take the domestic, political heat involved in a Doha Round outcome.

And the rising powers say, no, no, there's a new rule here that's been embodied actually for years in the WTO and the trading regime called special and differential treatment. Developing countries don't have to give as much as they get in the trade rounds. And this comes from countries like China and Brazil and India, which are not exactly underdeveloped in the traditional sense. Is the gap in the Doha Round now unbridgeable? And if the Doha Round fails, what does that imply in terms of where the international trade regime goes?

SUBRAMANIAN: I have a piece in Foreign Affairs last year, it's exactly on this question. So here's my take on this. I agree with you that China and India have perhaps not done enough to bring the Doha Round to a successful conclusion. But I think they are not the only ones to blame. I think the U.S. is not blameless on the Doha Round either.

But I think the bigger question is the following. The Doha Round was -- began in actually 1990 -- 2000. Ten years on, is this the most relevant agenda in terms of the pressing issues in the trade system going forward? I say -- I kind of jokingly say that the reason we're trying to pursue the Doha Round is what Irvine-Mallory said about why we climb Everest. Because it's there, not because we necessarily think that this is -- you know, what is going to really (cost ?).

Because there are much bigger issues in the trading system now than any analysis of the Doha Round will show you, that even if you concluded it, the gains are modest at best. There is a huge agenda -- exchange rates, trade and climate change, export restrictions, how to regulate the financial system internationally. What do you do about export controls?

All these are pressing issues, and none of this is on the agenda of the Doha Round. So, I agree with you therefore that, you know -- in order to get to this bigger agenda, perhaps we need to complete the Doha Round. But that would be a very modest reason to do the Doha Round. To do it to get past it, rather than to do it because it's somehow going to -- because the failure of the Doha Round is not going to -- not even be a rip, register on the radar screen of the world economy, because it's so modest.

SANGER: Whitney, you look like you have something you want to say on this.

DEBEVOISE: Well, I think the estimates in terms of the trade benefits, although not negligible, pale in comparison to some of the other numbers that we've been talking about. I mean, we just reinforced the IMF with some 750 billion (dollars) of resources. I think the estimate for the Doha Round is maybe 100 billion (dollars) plus. So, it's important, it's important symbolically, I think. But in relationship to some of these other issues where you know, we put 100 billion (dollars) into reinforcing the IMF, China put 50 billion (dollars) in. And that's certainly more than their weight in the global economy.

VAN AGTMAEL: Could I --

SANGER: Sure.

VAN AGTMAEL: I just -- on this point -- I mean, it's very interesting to sit in a room like this and hear comments on this. And I spend a lot of my time in emerging markets. And you would get a very different perspective. They would say, with some justification, at our stage of industrialization, we're a lot more open than you ever were. That's true for China, and recently also true for India. They made remarkable progress.

Now, we are still right in saying, you haven't opened up enough. They would say -- and again, rightfully -- well, what about your agricultural subsidies? I think the real problem in Doha is that we still haven't gotten used to the fact that we don't dominate these forums any more.

These countries now are players. They are -- you know, before the crisis, they had a quarter of the world's GDP. Now, this meltdown taught us one lesson. That is, the problems we had were more serious than we thought. And the problems they had were much less serious than we thought.

And so, they came out of this crisis with a third of global GDP. In 10, 15 years, it's going to be close to half of the world's GDP. I'm not talking about purchase power parity, just market based. So, they are real players, and they are, as Brazil and Turkey just showed, they're playing the game somewhat different than we would sometimes like. And it's annoying, but that's a fact of life.

SANGER: Jennifer -- somebody is coming to you.

QUESTIONER: Hi. Jennifer Hillman from the German Marshal Fund and the WTO. I'm curious if you can comment -- we're talking about global institutions, about the tension, as I see it, between global institutions and what's going on, on the bilateral and the regional side. I mean, to me, if you look at a lot of these economic activities, particularly on the trade side, where all the action is, is on the bilateral and/or the regional side.

I mean, you now have more than 400 regional or bilateral trade agreements notified to the WTO. You look at Europe engaging in major negotiations with Canada, with India, with -- you know, they've just finished with Korea. They restarted with the Mercosur countries. So, you see on the trade front, you know, really if you will, the game in town is on the regionals and the bilaterals.

You mentioned, you know, on the monetary funds side, you've got the Chiang Mai Initiative where you see sort of, if you will, a competitor to the global side. If you look on the development side, you look at China's contributions to the IDA. I mean, the fund that's really supposed to help sub-Saharan Africa, and it's at the level of $30 million. And yet, China as a huge, huge bilateral player in terms of development aid that they control, going into sub-Saharan Africa.

You look again on the development side at the growth of the trust funds in the World Bank where a huge amount of the disbursements out of the World Bank are really trust funds, which are in essence bilateral aid masquerading under the guise of the World Bank in terms of being multilateral. How do you see this tension between sort of regional bilateral institutions and arrangements, vis-a-vis the global institutions -- the Bank, the Fund, the WTO, and others? Is it a healthy tension? If it's not healthy what if anything should the global institutions be doing about it?

DEBEVOISE: Well, I think what you're seeing is a whole series of collective action problems. And the world is casting around for the ways to resolve these collective action issues. And in some instances where for example you don't have necessarily one nation, one vote, you could maybe make some progress. In others, it's slower and so the escape hatch is the bilateral or the regional or whatever.

I think we need to reestablish the value proposition for these institutions. And it's not just the value proposition for, you know, the OECD countries, for example, it's for all the members. You were just talking a minute ago about some of the changes. You know, some of the countries in South America learned some of the lessons about the importance of good macro policies, the importance of cleaning up their financial systems. And they actually came through the most recent crisis in fairly good shape. So, in a sense, they were rule followers.

VAN AGTMAEL: They followed the Washington consensus.

DEBEVOISE: Yeah.

VAN AGTMAEL: We ignored it.

DEBEVOISE: Yeah. So, I think we need to constantly review the incentives here. And I don't think we'll have the same solution for you know, every collective action problem. But I think we need to constantly be aware of the role the multilaterals can play in trying to resolve this.

SUBRAMANIAN: I think it's a great question. I think one way to judge them -- judge these regional efforts is to see whether they are, you know, in the famous, whether they're building blocks or stumbling blocks, i.e. whether they're complimentary with the multilateral or undermining them. And at least so far, I would argue that you know by and large they have been complimentary and not undermining.

If we take trade, for example, it's what Bob Zoellick says you know, there is a competitiveness liberalization dynamic, right? All these bilateral free-trade agreements are being negotiated, so that puts pressure on people left out to similarly negotiate these agreements. And then, you get a world where liberalization proceeds. I think the Greek bailout is a fantastic example where, you know, you thought it would be a completely regional initiative, but actually, it said, we're going to use the IMF.

And it was actually very complimentary to the (internationals ?). Chiang Mai still says any -- you know, use of resources has to be triggered by Fund approval. So, thus far, I think we're still hopefully in a situation where the regionals are -- the regional initiatives are broadly supportive of the broader multilateral. But that's not something we can take for granted going forward, especially with some of the things that you said about the trust funds and the Chinese investments, you know, and so on. So, it remains open, but so far I think this -- we're hopefully okay.

SANGER: We've only got about 10 minutes left. So we're going to move to the council's favorite lightning round collection here, where I'm going to grab about two or three questions together. And then, we'll answer them, we'll see if we can do just a couple of those.

Sir.

QUESTIONER: Let me try to provoke the panel quickly with a U.N. question. We seem to have a disease called Brettonnitis these days, largely as a result of the financial crisis. But we seem to be forgetting the valuable role of a lot of the U.N. institutions. I know working for the U.N. I feel like Cyrano de Bergerac. We suffer insults all the time, and I feel as though I could insult the United Nations a lot more powerfully than what we're hearing.

But we neglect many of these institutions at our peril, and indeed, are neglecting them at our peril. And particularly in the G-20 format, are marginalizing and ignoring the linkages to what the WHO, the UNICEF, and a number of the institutions are actually accomplishing on the ground. One nation, one vote is not what the United Nations is, classically. The problem with the United Nations, it's rigid coalitions in the General Assembly, not one nation, one vote. But we can debate that another time.

I just think the failing to include the United Nations institutions in a discussion of how we're going to restructure the global economy is a fool's errand.

SANGER: Okay, sir.

QUESTIONER: Allan Wendt. I'd like to ask Mr. van Agtmael to expand a bit on his view that the Euro will survive. Do you think that means that the wealthier parts of the EU, notably Germany, will consent to the continuing transfer of real resources to the poorer parts of the EU? What is the basis for your positive prognostication?

SANGER: Okay. Well, why don't we start with those two, and why don't we -- we'll start with the second question first. What would hold the Euro together under these circumstances?

VAN AGTMAEL: The short answer is yes, that is to say if the Euro is going to survive, northern Europe, that's largely Germany, but not just Germany -- Germany, the Netherlands, Belgium, France, et cetera -- or comparatively better off, we have to shoulder much of that burden. Now, if it is limited to Greece and Portugal, then I think they can bear that burden. If Spain blows, then all bets are off.

SANGER: Anybody else on this, before we turn to the U.N. question?

SUBRAMANIAN: Well, I think you know, if you're talking about one of the issues that hasn't come up in terms of the survivability of the eurozone, is this whole question of -- we've been talking about global imbalances. But the biggest imbalance has been within Europe between Germany running structured surpluses, and these countries. And going forward, unless there's a mechanism for resolving that, I mean, I don't think the eurozone is going to work. It's going to -- you know, I somehow say, is Germany China writ large or vice versa?

VAN AGTMAEL: That's the issue of, let's say, regional conditionality. I mean, Germany will put conditions. They may not say so openly, but that's what's going to happen.

SUBRAMANIAN: No, but this requires Germany to be expansional you know, if this imbalance problem is not going to keep reemerging within Europe.

SANGER: Who wants to handle the interesting U.N. question here?

DEBEVOISE: Well, I think the question was probably a little bit directed at something I had said, so I'll make an effort to respond. It's important to remember that the Bretton Woods Institutions technically are part of the U.N. system. They just have their own arrangement with the U.N., which keeps their governance separate. But the bloc-itis definitely exists.

I had the privilege of attending a joint session of the ECOSOC, the Bretton Woods Institutions, UNCTAD and the WTO, where ambassadors from G-77 countries, some of the BRICs that have been referred to, stood up and roundly denounced the Bretton Woods institutions -- institutions where they sit on the board and are clamoring for a bigger voice. So you know, the family like many families has its dysfunctional elements. But there is no denying that the U.N. does excellent work in the specialized agencies.

The World Bank, for example, when it operates in the food area, partners very nicely I think with several U.N. organizations. So, the comments I was making were really in the contents -- the context of, you know, today's subject matter, which is the governance issue, and the role of emerging powers. And I think part of the question of being responsible as an emerging power is going to be how to figure out how to operate in these other fora.

I mean, in the discussion about re-rating voting at the Bank and the Fund, there's a certain major emerging power, which always talks about solidarity with the poor. And yet, these things are a zero sum game. So, everyone who goes up dilutes the others.

And then, that's led to various mechanisms to protect the smallest and poorest. Something that, you know, the United States supports. Something that's really necessary because of the views that are held in our Congress. But it -- some of these fault lines are starting to be exposed.

SANGER: We only have time for one more brief round of questions. And we only have four or five minutes left. So, let me just see the last hands that we had of people who didn't get called upon -- anybody? Going once, going twice, good.

VAN AGTMAEL: I would like to, if I could, come back to the very first question that was asked, and we didn't spend a lot of time on, which was the reserve currencies. You said -- well, we're going into unprecedented territory. First of all, it may be unprecedented, but it was not unforeseen. In fact, at the very beginning of the special drawing rights, that's exactly the idea that it was -- to be used eventually as a reserve currency.

But think back, you know, when we went from the gold standard to the British pounds. That was unprecedented. When then the dollar replaced the pound, it was unprecedented. And things have changed, and so we are going into, I believe, an era where a change in the reserve currencies is simply inescapable. And it's unprecedented, but not unforeseen, and manageable, I think.

SANGER: Well, thank you all. We have run out of time, and we have the usual generous council five-minute break to refuel yourself with caffeine. But I want to thank each of the panelists for what was a really fascinating discussion at a really interesting turning point in the global economy. So, thank you all. (Applause)

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